Foster Farms could bring its chickens to Weld County

A national chicken company, Foster Farms, has its eyes on northeastern Colorado and may bring a multimillion dollar investment and up to 1,200 jobs to the Weld County economy.

Foster Farms, based out of California’s San Joaquin Valley outside of San Francisco, has been looking for the past several months in the area to locate a feed mill and a chicken processing plant to be supplied by up to 75 area farmers growing its chickens. After talking with officials in Weld, Morgan and Logan counties, company officials have not made any decisions.

“We are very interested, and we’re very encouraged by what we see, but we’re two to three months away from making any decision,” Foster Farms President Don Jackson said Friday from his California offices. “All of our requirements have to be met before we could make that. We want something that’s obviously good for Foster Farms, but unless it’s good for the local region, farmers, employees and communities, it’s not going to work. So, it will have to be good for everyone.”

The company markets its product as locally grown. Building in the Rocky Mountain region would help the company keep to that promise.

“Even today, we have a significant share in the Colorado and even the Rocky Mountain area,” Jackson said. “Even though we have a major share of fresh chicken sales there, our brand is not produced there.”

The company could infuse upward of $300 million into the economy in construction alone, Jackson said. It could spend from $125 million to $150 million on the processing facility and feed mill, and farmers would likely invest a like amount in building chicken houses. There also would be another approximately $25 million in annual salaries, as well as approximately $25 million in annual payments to farmers growing chickens.

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“Working with local farmers opens yet one more option for agriculture in our region,” said Larry Burkhardt, president of Upstate Colorado Economic Development. “The agriculture situation is changing rapidly as we get exposed to the international influences of grain prices associated with … ethanol” for example.

“Given what I know about what the company is doing, in reality, we have one of the strongest chances of landing them, probably because of the water, rail and labor.”

Foster Farms needs good access to rail to ship in grains for feed, Jackson said, which appears to not be a concern with two major lines in northeastern Colorado: one north and south through Greeley and one from Sterling to Wiggins.

In addition to having an adequate, and ready labor force, and farmers interested in working with the company, the next large issue would be water.

“To run any kind of meat processing facility, they are water intensive, you have to have adequate supply of water, and that appears to be available in the areas we’ve looked,” Jackson said. “We’ve learned in Colorado, water is a precious commodity. We’ve learned enough to know that it will come at a price.”

Greeley officials recently offered Leprino Foods of Denver a good deal on its water needs, essentially a carrot to bring the mozzarella cheese factory to town. It was done through a city ordinance that only gives such incentives if companies pay rates that help residents improve their standard of living.

The chicken processing industry is notoriously low-paying; a 2002 study by the National Chicken Council showed that average hourly wages for production workers was $9.76 an hour. In comparison, JBS-Swift & Co., was hiring at $13 an hour in its most recent spate of hiring to operate its second shift.

Jackson said he knows the wages will have to compete with other meat processors in the northern Colorado. The plan would be for 1,000 to 1,200 jobs from nonskilled to management.

“Obviously, we’ll have a wage rate that allows us to … be competitive with what it needs to be in that region,” Jackson said, adding that he’s not completed his study on the labor market in this area to determine those rates.

Any deal would hinge on farmer support, as well. Foster Farms would need from 50-75 farms in the area to build roughly 350 chicken houses to raise up to 1.25 million chickens a week for processing, Jackson said.

“Contract growers is probably the biggest unknown for us, and we’re just beginning to plan meetings with local farmers to see the level of interest,” Jackson said.

He said Foster Farms would ask the farmers to bear the costs of building the chicken houses, but Foster Farms would supply the chickens and feed, plus payment for growing. Jackson said the company would seek 10- to 15-year contracts with the farmers.

Ideally, all operations, from the chicken houses to the processing facility, would be within a 40-mile radius, Jackson said.

Burkhardt said everything so far is looking good to bring the company to Weld County.

“There are a few elements that have to come together: water, employees, farmers, and if he can get all those put together, I think this area will see a new industry,” Burkhardt said.

Foster Farms is based out of the San Joaquin Valley in California. The company was started by the Foster family in 1939 near Modesto, Calif. The company, which now employs 10,000, has locations in California, Oregon, Washington, Delta, Colo., Arkansas and Alabama. The Delta facility is a hatchery, where eggs are hatched then shipped to California.

The company is looking to expand its market share in the Rocky Mountain area, which includes Idaho, Montana, Utah, Wyoming, Colorado, New Mexico, and potentially Arizona and Nevada.